Nikolay Pavlov: Gas prices in Bulgaria are lower than in Europe as a result of supply contracts and the formulas set in them

The 20 percent rise in natural gas prices since September is not the first. Since the beginning of the year, there has been a lasting and significant increase in the prices of European gas hubs, reaching record levels in historical terms. Currently, prices reach 50-52 euros per MWh, but the gas company continues to offer its customers natural gas at lower prices. This was commented in the morning block of BTV by the executive director of Bulgargaz Nikolay Pavlov.

Pavlov also pointed out the reasons for the rise in gas prices.

"Over the last 12 months, especially since the beginning of 2021, natural gas prices on European gas markets have risen steadily and significantly, reaching record levels historically. Currently, the price of natural gas traded on European gas markets reaches 50-52 euros per MWh. The main factor influencing this rise in prices is the increased global demand caused by economic recovery after the COVID-19 pandemic. Also in recent months there have been reduced, insufficient supplies to Europe. This also has an impact on reducing the amount of natural gas in gas storage facilities in Europe and this raises concerns about a shortage of gas for the winter and an increase in the price, "said Pavlov.

He clarified that according to the company, the filling of European gas storage facilities at the beginning of September was 67% compared to 91% last year.

Specifically for Bulgaria, the executive director of Bulgargaz clarified that the company continues to inject gas into the underground gas storage in Chiren and at the end of the filling period by the end of September "will be 8% more than last year." "That is, we have provided gas for the Bulgarian market for the autumn-winter season, when the extraction period ends," he said. According to him, the quantities pumped at a lower price will be included in the sale price of Bulgargaz for the next 6 months.

Bulgaria is completely dependent on natural gas imports. That is, the prices at which Bulgargaz buys natural gas from its suppliers directly reflect the development of international gas markets. In this aspect, Bulgargaz cannot remain unaffected by what is happening on the international gas markets. It should be clarified here that neither Bulgargaz, nor the EWRC, nor the government can influence these market processes.

The most important thing for the Bulgarian consumer is that our price is more profitable and low and that the Bulgarian industry pays for the gas at a lower price. The trade and pricing policy of the company allows this to happen and at the moment the prices for the Bulgarian market from the beginning of 2021 are significantly lower than those on the European gas markets, "Pavlov said.

He used an example, according to which the price of Bulgargaz for September for September is BGN 69.40, which is 35 euros and 48 cents converted into euros. "For comparison, European gas markets reach 52 euros - between 45…".

In response to a question about how the company manages to achieve this, Pavlov, recalling the renegotiation of the terms with Gazprom Export, answered that it is a result of the concluded supply contracts and the set formulas.

Commenting on the prices of the district heating companies, the executive director of Bulgargaz said that this was not a question for him. At the same time, he specified that the pricing of the gas company is on a monthly basis, and of the district heating - on an annual basis.

"If we go back a year, the EWRC set an estimated gas price for all district heating companies, which in the end turned out to be significantly higher than the real price they paid for natural gas. So, for example, Sofia District Heating generated an overstated revenue of BGN 22 million, or simply put, they bought gas from Bulgargaz for BGN 8 and sold it in the form of energy to their customers for BGN 10, thus reaching an overstated revenue of BGN 22 million. . Despite this inflated income, they generated new debt. They have doubled their debt since last year, "he said.

Subsequently, Pavlov clarified that the company had filed three lawsuits in order to collect its receivables in the amount of BGN 95 million. According to him, half have been paid and the payment deadline expired on Tuesday. In addition, the executive director of the public supplier clarified that a letter had been received from Sofia District Heating, with which they "undertook to pay BGN 35 million by September 17. They asked for the lawsuit to be withdrawn and for the accounts not to be seized." We did it and we expect the debt to be repaid in due time ", concluded the executive director of Bulgargaz.